The rise of generative AI technology has sparked discussions about how it will impact various industries, including financial services. The potential for disruption and job loss in the industry is a major concern, but the impact of generative AI will differ depending on how the technology evolves. It is important for financial services organizations to consider the possible outcomes and develop long-term plans for how they will react to each scenario.
The impact of generative AI on the financial services industry can be simplified into three potential future scenarios. The first scenario involves non-financial tech firms developing a dominant generative AI-based personal assistant that could disintermediate financial firms. The second scenario sees the largest global banks using generative AI technology to further solidify their dominance in the industry, while the third scenario involves no firm establishing a dominant generative AI assistant, resulting in the technology becoming commonplace without major changes to market share dynamics.
In the event that non-financial tech players take a dominant position in the generative AI space, financial services firms would need to innovate and offer compelling products and services to compete with high-performing virtual assistants. This scenario could make the industry more competitive and force firms to adapt to changing consumer behavior influenced by AI assistants. On the other hand, if the largest financial firms leverage generative AI to strengthen their dominance, smaller institutions may struggle to keep up and lose market share to their larger competitors.
In the scenario where no dominant generative AI assistants emerge, financial services firms would need to optimize their own generative AI technology to improve customer service and drive desirable actions. Developing a high-quality generative AI assistant would still be a complex undertaking, but firms would not face as significant a threat to their market share as in the other scenarios. Regardless of the outcome, organizations must plan for the impact of generative AI on the financial services industry and consider how to adjust their workforce and strategies accordingly.
As generative AI technology continues to evolve, organizations need to start planning for future scenarios and how they will react in each situation. Whether restructuring, investing in cutting-edge technology, or adapting to changing consumer preferences, firms must be proactive in preparing for the potential implications of generative AI. By considering the possible outcomes and developing strategic plans, financial services organizations can better position themselves to navigate the changing landscape of the industry driven by AI technology.
